Today on AirTalk, we'll be discussing the Stockton bankruptcy, the upcoming film "The Citizen" about a Lebanese immigrant who arrives in America the day before 9/11, the new four team college football playoff and how the non-profit microlending organization Kiva is planning to help L.A.'s small businesses. We'll also talk to Henry Crumpton, former operations officer in the CIA’s Clandestine Services, about what exactly modern spies do and what role they play in warfare today.
How will bankruptcy affect Stockton, Calif.?
The city of Stockton is following in the footsteps of millions of cash strapped Americans and filing for bankruptcy.
In a 6-1 vote last night, the Stockton City Council adopted a special budget plan, to govern spending once under bankruptcy protection. Stockton is the biggest U.S. city by population to take such drastic financial measures, with an expected budget shortfall exceeding $20 million.
Under the bankruptcy plan, payments for debts and legal claims will be suspended, while retiree medical benefits payments will be reduced. No further cuts are expected to staffing levels of Stockton's police force, fire department or other city employees.
L.A. Times central valley reporter, Diana Marcum, says that although Stockton’s problems can be seen in other cities around the state, it is also something unique to the Central Valley.
“It wasn’t just all of these investments and this perfect storm. There are underlying reasons. It’s an [agriculture] economy, it’s not as diversified of an economy as other parts of California, there’s a lot of entrenched poverty, there’s a lot of segregation of neighborhoods,” said Marcum on the AirTalk. “I mean there are problems that go all the way back to the dust bowl.”
Despite these unique circumstances, most analysts and academics expect that Stockton will not be an isolated case of a larger California city filing for bankruptcy.
“In terms of its problems, it’s not a one off,” said John Ellwood, Professor of Public Policy at UC Berkeley. “It is representative. It will obviously be an individual decision on the part of each government whether to go the bankruptcy route.”
Joe Nation, Professor of the Practice of Public Policy at Stanford University says that we are probably only seeing the tip of the iceberg if significant reforms are not made both on the spending side and the revenue side.
Former Los Angeles mayor Richard Riordan foresees the City of Los Angeles as one of the places that may be forced to file for bankruptcy in the near future, ““Unless they can make major changes in their union contracts and pensions and health care,” said Riordan. “I predict they would have to go into bankruptcy by 2015.”
No one can say with certainty how the Stockton bankruptcy will go, according to Marcum. The goal of the city is to protect the services they have while they are in Chapter 9. It will be up to the courts how the city is allowed to restructure.
What about pensions and healthcare?
A major point of contention is the issue of pensions which, under current California state law, are guaranteed.
“But what happens if the system doesn’t have the money? Under current law, think about start selling oceanfront property, Santa Barbara, San Diego because that is current law,” said Elwood. “However, you know that what’s gonna happen is there are going to be a series of cases where individuals and governments are going to go to the courts and say ‘We can’t do that anymore’...Now traditionally that’s what happens when you go to bankruptcy courts,”
The City of Stockton recently went from spending $10 million a year on pensions to the latest number showing the city spends $33 million per year on pensions, according to Nation.
“The school districts are way underwater now...If you look at their health care, their pensions, and a bunch of other things. They are far underwater...If you look at the Governor’s increase in taxes and his initiative. He says that the money is going to go to education but that’s misleading because none of it is gonna go in the classroom, it’s all gonna go toward pensions,” Riordan said.
Professor Nation says the solution is for cities and counties to sit down at the bargaining table with unions to try and pension and retiree benefit issues.
However, it is not just pensions that are causing many of the problems within struggling California cities. Health benefits are another concern that the Stanford University Professor has with ongoing city crises all over the state.
“I know that in Stockton, one of the concessions the city made years ago to the unions, was that an employee would get retiree health benefits after one day on the job...That’s just insane,” Professor Nation concluded.
On the issue of retirement age
The age of retirement is the biggest concern for Huntington Beach Mayor Pro Tem Devin Dwyer. His city is currently underfunded by $311 million.
“We’re allowing [city employees] to retire too early and then a lot of these employees go back and they contract with another city and go back to work and do the same thing. And now they’re getting their pension and they’re getting paid to do their work,” Dwyer said.
For many cities, 50 is the age of retirement which is in contrast to the private sector which sees retirement ages closer to late 60s, depending on when you were born.
Raising taxes are an option, but a tough sell
Professor Nation sees raising revenue through taxation to be a tough sell to an electorate.
“I would say for voters it’s very tough for voters anywhere in California whether it’s Stockton, or statewide to say yeah we’ll throw more tax money at a broken system because the pension system in this state is broken.” Nation says.
Proposition 13 also causes problems for many cities hoping to earn more money through property taxes. It is a hot button issue that many politicians are afraid to tackle, according to Nation who was a former legislator.
The future for bankrupt cities
Ultimately, for cities who choose to go into bankruptcy their future lies in the courts. The city of Vallejo, Calif. filed for bankruptcy in 2008 and was able to restructure its pension contracts and was released in 2011.
“It very much depends on what the courts decide in terms of, particularly pensions and health care contracts, whether those will stay and under what conditions they will stay,” Ellwood said.
Weigh In
Stockton is one of just thirteen municipal bankruptcies to be filed in the United States in the past year. Do you question how a city can get into such a financial mess? If you have roots in Stockton, what are your concerns about how the city will be perceived?
Guests:
Richard Riordan, former mayor of Los Angeles
John Ellwood, Professor of Public Policy, Goldman School of Public Policy, University of California, Berkeley; specializing in financial management and public sector budgeting; board member, California Budget Project
Diana Marcum L.A. Times reporter for the central valley
Joe Nation, Professor of the practice of public policy at Stanford University
The Arab-American Dream on the big screen
As resistances calling for democracy continue in Middle Eastern Arab countries, it is easy to overlook the lives of those who have emigrated from their home countries to the United States. Director Sam Kadi hopes to place some focus on this issue in his feature film debut, “The Citizen.”
Kadi’s film centers around a Lebanese man who receives a green card through the lottery system and moves to New York City. Unfortunately, he arrives on September 10, 2001, a day before the terrorist attacks that would change America, and its perception of the Arab world, forever. As one might imagine, the rest of the protagonist’s future will be shaped by what happened on that one day.
The story is inspired by true events, and Kadi himself is an immigrant who came to the U.S. from Syria.
How is the main character’s life affected by 9/11? What did Kadi hope to achieve through making this film? What’s next for the new director?
Guest:
Sam Kadi, writer/director of “The Citizen,” legally emigrated from Syria to the U.S.
College football gets four-team playoff
The Bowl Championship Series is dead: Long live the college football playoff.
Following six months of deliberations over how to determine the major college football champion, a committee of university presidents gave the green light to a BCS proposal offering a four team playoff.
This will be the first time since 1998 that the system has been changed from a straight face off between the top two teams in the country at the end of the season. The new four team format will come into play for the 2014 season.
Are you in favor of this change? What impact will it have on the college game? IS it time for an overhaul - will it make the final more exciting?
Guest:
Chris Dufresne, L.A. Times Sports Writer covering college football and basketball
Microloans come to the Southland
You might not have heard about Kiva City LA, but it could be one of the best ways to spur economic growth in Southern California.
Kiva, a non-profit organization, is committed to alleviating poverty through microlending. Traditionally, this process has been used for people to lend as little as $25 to individuals or families all across the world. Now, Kiva is teaming up with the Mayor’s Office of Small Business, Valley Economic Development Center and Visa Inc. to apply this same approach to small businesses in Los Angeles.
In the worst economic climate since the Great Depression, the country will be leaning on small businesses more than ever to spur growth. According to the U.S. Small Business Administration, small businesses account for two out of every three created jobs. In L.A., the country’s biggest small business community, there are 325,000 small businesses employing roughly 2 million people.
How exactly will Kiva City LA transfer small amounts of money from individuals to larger loans for businesses? What are the benefits of this process in the community? Would you be willing to lend money through such an organization?
Guests:
Matt DeBord, KPCC Reporter; writes the DeBord Report KPCC.org
Premal Shah, President of Kiva.org
Angela Stanislawski, Vice President of Operations for VEDC (Valley Economic Development Center)
The clandestine art of modern spies
In the days after the Twin Towers fell on 9/11, the CIA launched a global covert operations effort to combat terrorism. The organization focused primarily on Afghanistan, and the man they chose to organize and lead that campaign was one Henry Crumpton.
A former operations officer in the CIA’s Clandestine Services, Crumpton’s expertise made itself apparent with the results he oversaw in Afghanistan. In 2001, at the height of combat, there were less than 500 Americans on the ground, comprised by a blend of CIA and Special Forces. This strategy allowed for the U.S. and its allies in Afghanistan to rout Al-Qaeda and the Taliban in less than 90 days after the attacks.
This successful approach fundamentally changed the way America wages war, and is still the predominant tactic being used in the field today. In his book, Crumpton outlines what modern spies do and what role they play in the bigger picture.
How did Crumpton attain the rank of ambassador at large for America’s counterterrorism program? What lessons from his own experiences as a young man in the CIA influenced the way he worked in a leadership role? What’s the next step in evolution for America’s particular brand of war?
Guest:
Henry A. Crumpton, author of “The Art of Intelligence: Lessons from a Life in the CIA’s Clandestine Service,” former operations officer in the CIA’s Clandestine Service for twenty-four years, served as U.S. coordinator for counterterrorism with the rank of ambassador at large